Feb. 13 (Bloomberg) -- PBC Ltd., the biggest buyer of cocoa beans from farmers in Ghana, plans to raise 100 million cedis ($53 million) through a rights offer as it tries to reduce finance costs that cut profit last year.
“PBC needs the money so we don’t borrow heavily at high interest rates,” Maxwell Kojo Atta-Krah, managing director of the company, told reporters in Accra, the capital of the world’s second-biggest cocoa producer, today. “We hope to get approval from shareholders and start floating the shares by July.”
Net income in the fiscal year through September declined 64 percent to 10.1 million cedis after bean purchases fell by 17 percent. The company was “faced with unexpected high costs from loans and overdrafts for cocoa purchases,” he said.
In the quarter through December, which coincides with the first quarter of the cocoa harvest, profit rose 72 percent to 6.2 million cedis, the company said on Jan. 30.
While the Ghana Cocoa Board raises money for buyers through a syndicated loan at the start of each harvest, “delays in the payment of the monies mean we always need to borrow from banks at commercial rates,” Atta-Krah said.
PBC expects to buy 315,200 tons of cocoa in the current 2012-13 crop season. That would be about 37 percent of the national output, which is estimated at 800,000 tons, Atta-Krah said.
The company bought 207,644 tons of the chocolate ingredient in the 16 weeks of the season to Jan. 31, less than the 240,210 tons purchased in the same period a year earlier, George Boateng, deputy managing director of operations, said by phone today. “We believe we will catch up and meet our targets for the season.”
Shares of PBC, which used to be known as Produce Buying Co., on the Ghana Stock Exchange were unchanged at 19 pesewas by the 3 p.m. close in Accra. The stock has added 5.6 percent this year, underperforming the composite index, which has jumped 13 percent.
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